A federal judge has imposed a $4.72 billion judgment against Alex Mashinsky, the founder of the defunct crypto lending platform Celsius Network, and permanently banned him from the cryptocurrency and financial services industries. The judgment, signed by U.S. District Judge Denise L. Cote, requires Mashinsky to pay $10 million, coordinated with his Department of Justice criminal forfeiture obligations.
Mashinsky is currently serving a 12-year prison sentence after pleading guilty to commodities and securities fraud. The Federal Trade Commission (FTC) filed its complaint against Celsius and its executives in July 2023, accusing them of deceptive practices. Mashinsky misled customers about the safety of their deposits while engaging in high-risk investments.
FTC Settlement and Industry Impact
The FTC's settlement with Celsius in August 2023 included a $4.72 billion judgment against the company and a ban on offering crypto services. Mashinsky's personal settlement adds permanent restrictions on his future activities in both crypto and traditional finance sectors. The court found that Mashinsky knew Celsius's financial condition was precarious yet continued to promise customers “safe” and insured deposits, causing billions in losses to hundreds of thousands of users.
Following the news, Celsius's native token CEL briefly surged 3.76%. Analysts say this landmark ruling serves as a warning to crypto founders, demonstrating that regulators are deploying both criminal and civil tools to crack down on fraud. The lifetime ban ensures Mashinsky will never again operate in crypto or traditional finance.